Correlation Between JPMorgan Chase and GOLDMAN SACHS
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and GOLDMAN SACHS at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining JPMorgan Chase and GOLDMAN SACHS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JPMorgan Chase Co and GOLDMAN SACHS CDR, you can compare the effects of market volatilities on JPMorgan Chase and GOLDMAN SACHS and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in JPMorgan Chase with a short position of GOLDMAN SACHS. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and GOLDMAN SACHS.
Diversification Opportunities for JPMorgan Chase and GOLDMAN SACHS
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between JPMorgan and GOLDMAN is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and GOLDMAN SACHS CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOLDMAN SACHS CDR and JPMorgan Chase is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on JPMorgan Chase Co are associated (or correlated) with GOLDMAN SACHS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOLDMAN SACHS CDR has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and GOLDMAN SACHS go up and down completely randomly.
Pair Corralation between JPMorgan Chase and GOLDMAN SACHS
Assuming the 90 days trading horizon JPMorgan Chase is expected to generate 1.18 times less return on investment than GOLDMAN SACHS. But when comparing it to its historical volatility, JPMorgan Chase Co is 1.1 times less risky than GOLDMAN SACHS. It trades about 0.2 of its potential returns per unit of risk. GOLDMAN SACHS CDR is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 2,616 in GOLDMAN SACHS CDR on August 30, 2024 and sell it today you would earn a total of 400.00 from holding GOLDMAN SACHS CDR or generate 15.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan Chase Co vs. GOLDMAN SACHS CDR
Performance |
| Timeline |
| JPMorgan Chase |
| GOLDMAN SACHS CDR |
JPMorgan Chase and GOLDMAN SACHS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and GOLDMAN SACHS
The main advantage of trading using opposite JPMorgan Chase and GOLDMAN SACHS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, GOLDMAN SACHS can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in GOLDMAN SACHS will offset losses from the drop in GOLDMAN SACHS's long position.| JPMorgan Chase vs. Birchtech Corp | JPMorgan Chase vs. Algonquin Power Utilities | JPMorgan Chase vs. Exco Technologies Limited | JPMorgan Chase vs. Quorum Information Technologies |
| GOLDMAN SACHS vs. Western Copper and | GOLDMAN SACHS vs. Maple Leaf Foods | GOLDMAN SACHS vs. Labrador Iron Ore | GOLDMAN SACHS vs. Profound Medical Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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